Order intake and net sales developed well in the · Anchor Order intake and net sales developed...

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Order intake and net sales developed well in theOrder intake and net sales developed well in theequipment businessesequipment businesses

Highlights of the review period January-March 2018Highlights of the review period January-March 2018• Order intake increased 7% to EUR 1,507 million (1,413)

• Net sales increased 6% to EUR 1,066 million (1,005)

• Book-to-bill 1.41 (1.41)

• Comparable operating result increased to EUR 88 million (82), which represents 8.3% of net sales (8.1)

• Earnings per share increased to 0.10 euro (0.09)

• Cash flow from operating activities decreased to EUR -42 million (2)

• Order book at the end of the period increased 7% to EUR 5,490 million (5,114)

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Wärtsilä's prospects for 2018Wärtsilä's prospects for 2018The demand for Wärtsilä’s services and solutions in 2018 is expected to improve somewhat from the previous year. Demand by

business area is anticipated to be as follows:

• Good in Services thanks to growth opportunities in selected regions and segments.

• Good in Energy Solutions. The global shift towards renewable energy sources and increasing electricity demand in the

emerging markets are supporting the need for distributed and flexible power capacity, including gas-fired generation,

energy storage, and smart integration technology.

• Solid in Marine Solutions. Despite improving sentiment, the marine market environment remains challenging due to

overcapacity and lack of financing.

Wärtsilä’s current order book for 2018 deliveries is EUR 2,951 million (2,744), which mainly comprises equipment deliveries.

Services’ business is largely transactional, with only around 30% of annual net sales coming from the order book.

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Jaakko Eskola, President & CEOJaakko Eskola, President & CEO“The beginning of 2018 was characterised by a favourable operating environment in the equipment businesses. Ordering activity

was healthy in Energy Solutions, thanks to the growing need for flexible, smart solutions in developed countries, and energy

infrastructure investments in the emerging markets. For Marine Solutions, improved demand in the merchant segment and

sustained activity in the cruise and ferry markets contributed to growth in orders received. While the economic outlook continues

to support a gradual recovery in the marine industry, the impact of increased geopolitical uncertainty on customer decision-making

is a concern. Services' net sales development was slower than expected during the first quarter, as customers in the merchant

and offshore segments continued to limit spending to essential repairs and maintenance. As a result, the group sales mix favoured

equipment deliveries, which burdened profitability.

Strengthening our digital offering, for instance through the projects developed in our acceleration centres, is central to securing our

competitive position in industries being transformed by increasing connectivity and new business models. The acquisition of

Transas, a leader in marine navigation solutions, training and simulation services, as well as ship traffic control is also important in

this context. It builds on our investments in software engineering capabilities and artificial intelligence and will play a key role in the

development of smart solutions and a digital platform. With this acquisition, we take a considerable step forward towards our

Smart Marine vision, which, alongside our Smart Energy vision, strongly positions Wärtsilä to enable a sustainable, low emission

economy.”

WÄRTSILÄ CORPORATION January-March 2018 Interim report 2

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Key figures

MEURMEUR 1-3/20181-3/2018RestatedRestated1-3/20171-3/2017 ChangeChange

RestatedRestated20172017

Order intake 1 5071 507 1 413 7% 5 644

Order book at the end of the period 5 4905 490 5 114 7% 5 100

Net sales 1 0661 066 1 005 6% 4 911

Operating result¹ 8585 76 12% 538

% of net sales 8.08.0 7.5 11.0

Comparable operating result 8888 82 8% 576

% of net sales 8.38.3 8.1 11.7

Comparable adjusted EBITA 9898 90 9% 612

% of net sales 9.29.2 9.0 12.5

Profit before taxes 7676 70 491

Earnings/share, EUR 0.100.10 0.09 0.63

Cash flow from operating activities -42-42 2 430

Net interest-bearing debt at the end of the period 438438 260 234

Gross capital expenditure 3737 9 255

Gearing 0.210.21 0.13 0.10

¹Items affecting comparability in the first quarter of 2018 included costs related to restructuring programmes of EUR 3 million (6).

As of 1 January 2018, Wärtsilä has adopted the IFRS 15 Revenue from Contracts with Customers standard by using the full

retrospective method. This interim report is published according to the new standard and comparison periods for 2017, including

the opening balance sheet, have been restated accordingly. Wärtsilä has also restated the 2017 figures for Marine Solutions and

Services, due to an internal transfer of certain service activities. This transfer has no impact on Group totals.

The share issue without payment approved by Wärtsilä’s Annual General Meeting on 8 March 2018 increased the total number of

Wärtsilä shares to 591,723,390. The share related figures in the comparison periods have been adjusted to reflect the increased

number of shares.

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Market developmentMarket development

Steady development in the service marketsSteady development in the service marketsService market activity during the first quarter of 2018 was in line with the previous year. In the marine markets, continued

momentum in the cruise segment compensated for lower service demand from merchant customers and steady activity in

offshore. The demand for scrubber retrofit projects improved, as customers prepare themselves for compliance with the

approaching global sulphur regulations. In the energy markets, service activity remained on last year’s level.

Power generation markets shifting towards smart and flexiblePower generation markets shifting towards smart and flexibletechnologiestechnologiesThe demand for Wärtsilä’s energy solutions was solid in the first quarter of 2018. The need for flexible power capacity and smart

solutions is growing, as solar and wind become increasingly cost competitive and utilities assess how to integrate such energy

sources into their asset base. These trends are particularly noticeable in the USA and Australia. In the emerging markets, countries

continue to invest in new power generation capacity to support economic growth and to alleviate power shortages.


Energy Solutions’ market shareEnergy Solutions’ market share

The strong demand for Wärtsilä’s energy solutions in 2017 supported market share growth, despite declining global power plant

investments in the up to 500 MW market segment. Wärtsilä’s market share increased to 19% (15), while global orders for natural

gas and liquid fuel power plants of up to 500 MW decreased by 20% to 20.1 GW for the twelve months ending in December (25.2

at the end of September). Global orders include all gas turbine and Wärtsilä orders with prime movers over 5 MW in size.

Solid activity in the marine marketsSolid activity in the marine marketsDuring the first quarter of 2018, 192 contracts for new vessels were registered (231, including late contracting). Market conditions

in the merchant segment have improved along with economic growth and growth in seaborne trade. The contracting of LNG

carriers was healthy, thanks to growing demand for LNG in the emerging markets and increasing exports from the USA and

Australia. High earnings supported continued activity in the cruise and ferry segment. Cruise customers are showing increased

interest in expedition vessels, while ageing fleets are creating replacement demand in the ferry segment. Despite some signs of

improving sentiment in offshore production, the investment appetite in the overall offshore industry remains limited. Planned

regulatory developments are driving demand for environmental solutions in the newbuild markets.

In terms of compensated gross tonnage, South Korea and China remain the largest shipbuilding nations with 42% and 31% of all

confirmed contracts respectively. Japan and Germany accounted for 13% and 6% of the global total.

Financial performanceAnchor

Order intakeOrder intakeWärtsilä’s first quarter order intake totalled EUR 1,507 million (1,413), an increase of 7% over the corresponding period last year.

The first quarter book-to-bill ratio was 1.41 (1.41).

Order intake for the Services business was stable at EUR 737 million (735). During the quarter, Wärtsilä signed a 5-year optimised

maintenance agreement with Hidrovias do Brasil for a fleet of eight pusher tugs operating in the challenging rivers of South

America. Wärtsilä also received a sizeable order to equip a fleet of 30 container vessels with Wärtsilä open loop scrubber systems.

Order intake for Energy Solutions increased by 2% to EUR 414 million (405). The most active markets were Asia and the

Americas. Significant orders received from these regions included a 211 MW smart power generation plant in South Australia, a

128 MW gas plant in New Orleans, and two new liquid fuel projects in Bangladesh of 100 and 105 MW. In addition to power

generation solutions, energy storage and grid management software orders were received for projects in Hungary and Portugal.

Marine Solutions’ order intake totalled EUR 357 million (273), an increase of 31% compared to the corresponding period last year.

Among the orders received was the supply of volatile organic compounds (VOC) recovery technology, LNG fuel gas handling

systems, and the auxiliary engines for two new shuttle tankers being built for Singapore based AET Tankers. The ships will operate

primarily on liquefied natural gas (LNG), enabling a significant reduction in CO2 emissions. VOC – the gas evaporating from the oil

cargo tanks – will also be utilised as fuel by mixing it with the LNG, thereby reducing the vessels’ bunkering needs. The first

quarter order intake also included solutions for the remaining two shuttle tankers from an order received in December 2017 to

supply four such vessels to TEEKAY. The vessels will feature a wide range of Wärtsilä’s latest technology innovations, which

enables them to reach a new level of economic and ecological performance. The conventional merchant segment accounted for

43% of the first quarter order intake, while cruise and ferry represented 40%. The navy segment's share was 6%. The gas carrier

segment’s share represented 5%, special vessels 5%, and offshore 2% of the total.


Order intake by business



Services 737737 735 0% 2 670

Energy Solutions 414414 405 2% 1 685

Marine Solutions 357357 273 31% 1 288

Order intake, total 1 5071 507 1 413 7% 5 644

Due to the internal reorganisation of service activities, EUR 49 million was transferred from Marine Solutions to Services in the figures for the firstquarter of 2017 and EUR 190 million for the full year.

Order intake Energy Solutions

MW 1-3/20181-3/2018 1-3/20171-3/2017 ChangeChange 20172017

Oil 399399 210 90% 1 838

Gas 429429 622 -31% 1 938

Order intake, total 828828 832 0% 3 775

Order intake in joint venturesOrder intake in joint venturesOrder intake in the Wärtsilä Hyundai Engine Company Ltd joint venture in South Korea, and in the Wärtsilä Qiyao Diesel Company

Ltd and CSSC Wärtsilä Engine Company Ltd joint ventures in China totalled EUR 49 million (24) during the review period January-

March 2018. The results of these companies are reported as a share of the result of associates and joint ventures.

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Order bookOrder bookThe total order book at the end of the review period amounted to EUR 5,490 million (5,114). The Services order book totalled EUR

1,401 million (1,234), which is 14% higher than at the same time last year thanks to the increased demand for long-term service

agreements. The Energy Solutions order book increased by 9%, totalling EUR 2,012 million (1,847), while the Marine Solutions

order book increased by 2% to EUR 2,077 million (2,033).


Order book by business

MEURMEUR 31.3.201831.3.2018RestatedRestated

31.3.201731.3.2017 ChangeChangeRestatedRestated

31.12.201731.12.2017

Services 1 4011 401 1 234 14% 1 220

Energy Solutions 2 0122 012 1 847 9% 1 871

Marine Solutions 2 0772 077 2 033 2% 2 009

Order book, total 5 4905 490 5 114 7% 5 100


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Net salesNet salesWärtsilä’s net sales for the review period January-March 2018 increased by 6% to EUR 1,066 million (1,005) compared to the

corresponding period last year. Net sales from the Services business was stable at EUR 535 million (534). Net sales for Energy

Solutions increased by 12% to EUR 267 million (239). Strategically important deliveries included the world's largest solar hybrid

power plant in Burkina Faso. The hybridisation of an existing 57 MW diesel power plant with a 15 MWp solar PV plant will enhance

plant performance, reduce fuel consumption, and lower CO2 emissions. Marine Solutions’ net sales totalled EUR 264 million (233),

which is 13% higher than in the corresponding period last year. Of the total net sales, Services accounted for 50%, Energy

Solutions for 25%, and Marine Solutions for 25%.

Of Wärtsilä’s net sales for the period January-March 2018, approximately 67% was EUR denominated, 20% USD denominated,

with the remainder being split between several currencies.

Net sales by business



Services 535535 534 0% 2 407

Energy Solutions 267267 239 12% 1 401

Marine Solutions 264264 233 13% 1 104

Net sales, total 1 0661 066 1 005 6% 4 911


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Operating result and profitabilityOperating result and profitabilityThe operating result for the review period January-March 2018 was EUR 85 million (76), which represents 8.0% of net sales (7.5).

The comparable operating result was EUR 88 million (82), or 8.3% of net sales (8.1). Items affecting comparability in the first


quarter of 2018 included costs related to restructuring programmes of EUR 3 million (6). The comparable adjusted EBITA was

EUR 98 million (90), or 9.2% of net sales (9.0). Purchase price allocation amortisation amounted to EUR 10 million (9).

Wärtsilä’s operating result was affected by a provision of EUR 3 million (11) related to long-term incentive schemes. The provision

covers all three ongoing programmes. Wärtsilä’s three-year long-term incentive schemes are tied to the development of the

company's share price, and they apply to approximately 100 company executives.

Financial items amounted to EUR -9 million (-5). Net interest totalled EUR -2 million (-2). Profit before taxes amounted to EUR 76

million (70). Taxes amounted to EUR 19 million (16), implying an effective tax rate of 24.5% (22.7). Earnings per share were 0.10

euro (0.09) and the equity per share was 3.62 euro (3.52). Return on investments (ROI) was 19.7% (16.8). Return on equity (ROE)

was 17.6% (16.9).

Measures of profit and items affecting comparability

MEURMEUR 1-3/20181-3/2018RestatedRestated1-3/20171-3/2017


Comparable adjusted EBITA 9898 90 612

Purchase price allocation amortisation -10-10 -9 -36

Comparable operating result 8888 82 576

Items affecting comparability -3-3 -6 -37

Operating result 8585 76 538

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Balance sheet, financing and cash flowBalance sheet, financing and cash flowWärtsilä’s cash flow from operating activities amounted to EUR -42 million (2) during the review period January-March 2018. Cash

flow was negatively affected by the timing of tax payments and the increase in working capital. Working capital totalled EUR 726

million (561) at the end of the review period, an increase of EUR 163 million from the end of the previous quarter in preparation for

deliveries later this year. Advances received at the end of the period totalled EUR 582 million (554). At the end of December 2017,

advances totalled EUR 522 million. Cash and cash equivalents at the end of the period amounted to EUR 282 million (403) and

unutilised Committed Credit Facilities totalled EUR 792 million (640), which includes a EUR 152 million long-term loan that remains

undrawn. A dividend of EUR 0.69 per share (0.65) corresponding to a total of EUR 136 million (128) was paid during the first

quarter. The second dividend instalment of equal size will be paid in September.

Wärtsilä had interest-bearing debt totalling EUR 726 million (670) at the end of March 2018. At the end of December 2017, the

interest-bearing debt totalled EUR 619 million. The total amount of short-term debt maturing within the next 12 months was EUR

103 million. Long-term loans amounted to EUR 623 million. Net interest-bearing debt totalled EUR 438 million (260) and gearing

was 0.21 (0.13).


Liquidity preparedness

MEURMEUR 31.3.201831.3.2018 31.12.201731.12.2017

Cash and cash equivalents 282282 379

Unutilised committed credit facilities 792792 765

Liquidity preparedness 1 0741 074 1 144

% of net sales (rolling 12 months) 2222 23

Less Commercial Papers -- -

Liquidity preparedness excluding Commercial Papers 1 0741 074 1 144

% of net sales (rolling 12 months) 2222 23

On 31 March 2018, the average maturity of the total loan portfolio was 49 months and the average maturity of the long-term debt was 50 months.

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Capital expenditureCapital expenditureCapital expenditure related to intangible assets and property, plant and equipment amounted to EUR 17 million (8) during the

review period January-March 2018. Capital expenditure related to acquisitions and investments in joint ventures totalled EUR 20

million (1). Depreciation, amortisation, and impairment for the review period amounted to EUR 30 million (33).

In 2018, capital expenditure related to intangible assets and property, plant and equipment is expected to be below depreciation

and amortisation.

Strategic developmentsAnchor

Strategic projects, acquisitions and joint venturesStrategic projects, acquisitions and joint venturesIn January, Wärtsilä and Schneider Electric signed an agreement to collaborate on data centre projects. The objective of the

agreement is to work together to open markets for innovative data centre energy optimisation solutions, focusing on hyperscale

projects having an electrical load of at least a 10 MW. Wärtsilä will provide the power generation plants, whereas Schneider

Electric will focus on energy distribution optimisation.

In February, Wärtsilä announced the expansion of its QuantiServ service offering with the acquisition of Lock-n-Stitch Inc., an

American engineering company specialised in cast iron repairs. The acquisition strengthens Wärtsilä’s service portfolio for

customers operating multiple brands. Wärtsilä also completed the acquisition of Trident BV, a Netherlands based company

specialised in underwater ship maintenance, inspection, and repair services. The acquisition enables Wärtsilä to become a leading

global operator in the underwater services market.

In March, Wärtsilä announced the acquisition of Transas, a global market leader in marine navigation solutions, professional

training and simulation services, ship traffic control, as well as monitoring and support. Transas leverages the latest in machine

learning and artificial intelligence to create a unified cloud-based platform for managing operations across the entire marine

ecosystem. The company’s large base of software engineers will play a key role in assisting Wärtsilä with the development of

smart products and a digital platform. The acquisition will also speed delivery on Wärtsilä’s promise to disrupt the industry by

establishing an ecosystem that is digitally connected across the entire supply chain, through applications that are secure, smart

and cloud-based. It represents a considerable step forward towards the realisation of Wärtsilä’s Smart Marine vision, whereby

smart vessels connect with smart ports and beyond to deliver three fundamental industry benefits: maximising the use of

resources and operational efficiency, minimising environmental impact and risk, and achieving the highest levels of safety and

security. The transaction is valued at EUR 210 million (enterprise value) and is expected to be closed during the second quarter of

2018.


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Research and development, product launchesResearch and development, product launchesDuring the first quarter Eniram, a Wärtsilä company, launched Eniram SkyLight 3.0 for fleet performance monitoring, and Eniram

Mobile to offer real-time decision-making support via mobile notifications. The latter solution was created to support situational

awareness based on collected historical and real-time data coupled with predictive analytics. Mobile technology makes these

insights transparent, giving captains, fleet managers, and senior executives instant access to the information needed for effective

and timely decision-making.

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PersonnelPersonnelWärtsilä had 18,182 (17,832) employees at the end of March 2018. On average, the number of personnel for January-March 2018

totalled 18,125 (17,802). Services employed 11,328 (11,067) people, Energy Solutions 1,084 (913), and Marine Solutions 5,197

(5,317).

Of Wärtsilä’s total number of employees, 20% (19) were located in Finland and 38% (38) elsewhere in Europe. Personnel

employed in Asia represented 26% (28) of the total, personnel in the Americas 11% (10), and personnel in other countries 4% (4).

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Sustainable developmentSustainable developmentThanks to its various technologies and specialised services, Wärtsilä is well positioned to reduce exhaust emissions and the use of

natural resources, and to support its customers in preparing for new regulatory requirements. Wärtsilä’s R&D efforts continue to

focus on the development of advanced environmental technologies and solutions. The company is committed to supporting the

UN Global Compact and its principles with respect to human rights, labour, the environment, and anti-corruption.

During the first quarter, Wärtsilä submitted its Aquarius Electro-Chlorination Ballast Water Management System for US Coast

Guard (USCG) type approval after successfully completing all the testing procedures required. Wärtsilä received type approval

from the International Maritime Organization (IMO) in 2013 for the Electro-Chlorination system and the same design was used for

the USCG application. This current testing has again proven the consistent performance of the Wärtsilä solution, and

demonstrates the high reliability, robustness and effectiveness of the system.

In March, Wärtsilä’s Seals & Bearings business and the Green Award Foundation announced their co-operation efforts in

environmental protection. Wärtsilä Seals & Bearings has joined the Green Award scheme as an incentive provider to further

encourage the reduction of emissions and a clean, sustainable future.

Personnel health and safety is a priority for Wärtsilä. Wärtsilä’s fourth global safety day was arranged in March under the theme

‘On the Road’. The aim was to raise awareness of risks and to support employees in making safer choices when travelling.

Wärtsilä’s share is included in several sustainability indices. During the first quarter, Wärtsilä was reconfirmed as a constituent of

the Ethibel Sustainability Index (ESI) Excellence Europe. Wärtsilä was also included in the annual Global 100 list of the most

sustainable large corporations in the world compiled by Corporate Knights.

Shares and AGMAnchor

Shares and shareholdersShares and shareholdersDuring January-March 2018, the volume of trades on Nasdaq Helsinki was 72,818,201 shares, equivalent to a turnover of EUR

1,354 million. Wärtsilä's shares are also traded on alternative exchanges, such as Turquoise, BATS CXE, and BATS BXE. The total

trading volume on these alternative exchanges was 71,375,280 shares.


Shares on Nasdaq Helsinki

Number ofNumber of Number ofNumber of

shares andshares and shares tradedshares traded

31.3.201831.3.2018 votesvotes 1-3/20181-3/2018

WRT1V 591 723 390 72 818 201

1.1. - 31.3.20181.1. - 31.3.2018 HighHigh LowLow AverageAverage 11 CloseClose

Share price 19.88 17.48 18.60 17.95

1 Trade-weighted average price

31.3.201831.3.2018 31.3.201731.3.2017

Market capitalisation, EUR million 10 621 9 892

Foreign shareholders, % 55.1 55.1

Flagging notificationsFlagging notificationsDuring the review period January-March 2018, BlackRock Inc. informed Wärtsilä of the following changes in ownership.

Release dateRelease date Transaction dateTransaction date ShareholderShareholder ThresholdThreshold Direct holding, %Direct holding, % Total holding, %Total holding, %

22.3.2018 21.3.2018 BlackRock InvestmentManagement (UK) Limited

Above 5% 5.07 6.03

19.3.2018 16.3.2018 BlackRock, Inc. Below 10% 8.22 9.66

14.3.2018 13.3.2018 BlackRock, Inc. Above 10% 6.69 10.04




28.2.2018 27.2.2018 BlackRock InvestmentManagement (UK) Limited

Below 5% onshares and votingrights

4.85 6.10


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Decisions taken by the Annual General MeetingDecisions taken by the Annual General MeetingWärtsilä Corporation’s Annual General Meeting, held on 8 March 2018, approved the financial statements and discharged the

members of the Board of Directors and the company’s President & CEO from liability for the financial year 2017.

The Annual General Meeting decided that the Board of Directors shall have eight members. The following were elected to the

Board: Maarit Aarni-Sirviö, Kaj-Gustaf Bergh, Karin Falk, Johan Forssell, Tom Johnstone, Mikael Lilius, Risto Murto and Markus

Rauramo.

The audit firm PricewaterhouseCoopers Oy was elected as the company’s auditor for the year 2018.


Dividend distributionDividend distributionThe Annual General Meeting approved the Board of Directors’ proposal to pay a dividend of EUR 1.38 per share in two

instalments. The first instalment of EUR 0.69 per share was paid on 19 March 2018. In accordance with the approved share issue

without payment (share split), the second instalment will be divided between one old and two new shares so that EUR 0.23 will be

paid on each share. The second instalment shall be paid in September 2018.

Share issue without payment (share split)Share issue without payment (share split)The Annual General Meeting approved the Board of Directors’ proposal to issue new shares to the shareholders without payment

in proportion to their holdings so that two new shares are issued for each share. Thereby, a total of 394,482,260 new shares were

issued. The new shares were registered in the trade register on 12 March 2018.

Authorisation to repurchase and distribute the Company’s own sharesAuthorisation to repurchase and distribute the Company’s own sharesThe Board of Directors was authorised to resolve to repurchase a maximum of 57,000,000 of the Company’s own shares. The

authorisation to repurchase the Company’s own shares shall be valid until the close of the next Annual General Meeting, however

no longer than for 18 months from the authorisation of the shareholders’ meeting.

The Board of Directors was authorised to resolve to distribute a maximum of 57,000,000 of the Company’s own shares. The

authorisation for the Board of Directors to distribute the Company’s own shares shall be valid for three years from the

authorisation of the shareholders’ meeting and it cancels the authorisation given by the General Meeting on 2 March 2017. The

Board of Directors was authorised to resolve to whom and in which order the shares will be distributed. The Board of Directors

was authorised to decide on the repurchase or distribution of the Company’s own shares otherwise than in proportion to the

existing pre-emptive right of the shareholders to purchase the Company’s own shares.

Organisation of the Board of DirectorsOrganisation of the Board of DirectorsThe Board of Directors of Wärtsilä elected Mikael Lilius as its chairman and Tom Johnstone as the deputy chairman. The Board

decided to establish an Audit Committee, a Nomination Committee and a Remuneration Committee. The Board appointed from

among its members the following members to the Committees:

Audit Committee:Audit Committee: Chairman Markus Rauramo, Maarit Aarni-Sirviö, Risto Murto.

Nomination Committee:Nomination Committee: Chairman Mikael Lilius, Kaj-Gustaf Bergh, Johan Forssell, Risto Murto.

Remuneration Committee:Remuneration Committee: Chairman Mikael Lilius, Maarit Aarni-Sirviö, Tom Johnstone.

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Risks and business uncertaintiesRisks and business uncertaintiesIn the Services business, slow economic growth and political instability in specific regions are the main risks for demand

development. The challenging conditions in the merchant and offshore markets are also seen as a potential risk.

In the power generation markets, fragile economic growth and slow decision-making continue to be the primary risks for demand

development. Geopolitical tensions and significant currency fluctuations can result in investment decisions being postponed in

certain countries. Low oil prices have a similar impact in the oil and gas producing countries. Price pressure resulting from the

prevailing competitive environment remains a risk.

Economic and political uncertainty, as well as emerging technologies and innovations, will challenge current business models and

trade patterns. The recently announced trade sanctions by the US and China are a concern for global trade. Low capital

expenditure from oil companies continues to limit offshore investments, and offshore production is facing increasing competition

from low cost onshore and shale production. In addition, increasing energy efficiency and the substitution of other energy sources,

will challenge growth in crude oil demand. Enforcement of environmental regulations and potential new regulations remain as a

source of uncertainty. Climate change continues to create pressure for reduced GHG emissions within the shipping industry.


Wärtsilä emphasises a holistic approach to the management of cyber and physical security risks in its internal operations and

customer offerings. The company’s cyber security team carries out its operational, governance and compliance activities in line

with the IEC62443 and ISO 27k protocols. Such activities include cyber assurance, risk management, detection, a secure

software development lifecycle, training, endpoint protection, network security, and cyber advisory services. Wärtsilä is

implementing new procedures for storing, processing and using data in the company’s systems so as to comply with the

upcoming General Data Protection Regulation. Cyber security is taken into consideration in this implementation.

The Group is a defendant in a number of legal cases that have arisen out of, or are incidental to, the ordinary course of its

business. These lawsuits mainly concern issues such as contractual and other liability, labour relations, property damage, and

regulatory matters. The Group receives from time to time claims of different amounts and with varying degrees of substantiation.

There is currently one unusually sizeable claim. It is the Group’s policy to provide for amounts related to the claims, as well as for

litigation and arbitration matters, when an unfavourable outcome is probable, and the amount of the loss can be reasonably

estimated.

The annual report contains a more detailed description of Wärtsilä’s risks and risk management.

TablesAnchor

Wärtsilä Interim Report January-March 2018Wärtsilä Interim Report January-March 2018This interim financial report is prepared in accordance with IAS 34 (Interim Financial Reporting) using the same accounting policies

and methods of computation as in the annual financial statements for 2017, except for the IFRS amendments stated below. All

figures in the accounts have been rounded and consequently the sum of individual figures can deviate from the presented sum

figure.

Use of estimatesUse of estimatesThe preparation of the financial statements in accordance with IFRS requires management to make estimates and assumptions

that affect the valuation of the reported assets and liabilities and other information, such as contingent liabilities and the recognition

of income and expenses in the statement of income. Although the estimates are based on the management’s best knowledge of

current events and actions, actual results may differ from the estimates.

IFRS amendmentsIFRS amendmentsIn 2018, the Group has adopted the following new standards and interpretation issued by the IASB.

As of 1 January 2018, Wärtsilä has adopted the IFRS 15 Revenue from Contracts with CustomersIFRS 15 Revenue from Contracts with Customers standard by using the full

retrospective method. This Interim Report for January-March 2018 is published according to the new standard, and comparison

periods for 2017, including opening balance sheet, have been restated accordingly.

IFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. It replaces IAS 18

Revenue, and IAS 11 Construction Contracts, and related interpretations, providing a new basis for revenue recognition. IFRS 15

is based on the principle that revenue is recognised when control of a good or service transfers to a customer in an amount that

reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

IFRS15 has an impact on the timing of recognition of revenue in two business lines: long-term service and maintenance

agreements, and gas solutions related construction contracts. The changes and impact caused by the standard are described

below.

In long-term service and maintenance agreements, customer value is created over time during the contract period. The revenue

recognition method changes from an output method (percentage of completion based on the proportion of the contracted

services performed) to an input method (percentage of completion based on costs incurred). Due to standard maintenance

schedules, this typically delays the revenue recognition in a contract. In construction contracts related to gas solutions, the key

value drivers are engineering, procurement, and project management, and the manufacturing is usually outsourced. The revenue

recognition method changes from an output method (percentage of completion based on the progress measured by surveys of

work performed) to an input method (percentage of completion based on costs incurred).


In the project business, contracts usually have clauses for liquidated damages which were previously accounted as provisions for

cost when their probability was more likely than not to occur. Liquidated damages are treated as a variable consideration

according to IFRS 15 and are required to be estimated at contract inception. According to IFRS 15, the net sales will be reduced

by late delivery penalties and liquidated damages, which have been expensed under IAS 18 and IAS 11. The restatement impact

of reclassification of penalties is insignificant.

Arising from the change of revenue recognition in long-term service and maintenance agreements, and gas solutions related

construction contracts from output method to input method, an adjustment of EUR -13 million has been made to Group’s retained

earnings as at 1 January 2017.

The restatement of financials 2017 result in a decrease in net sales of EUR 11 million, an increase in material and services

expenses of EUR 3 million, a decrease in income taxes of EUR 5 million, and a decrease in profit for the financial period of EUR 9

million. From the consolidated statement of financial position perspective, the application of the new principles impact the deferred

tax assets, other receivables, and other liabilities. Deferred tax assets increased by EUR 8 million and other receivables increased

by EUR 33 million. Other liabilities increased by EUR 60 million mainly due to changes in accrued expenses and deferred income.

These changes do not have an impact on cash flows.

Amendments to IFRS 2 Share-based PaymentIFRS 2 Share-based Payment - Clarification and Measurement of Share-based Payment Transactions (effective

for financial periods beginning on or after 1 January 2018). The amendments are intended to eliminate the diversity in the

classification and measurement of particular share-based payment transactions (accounting for cash-settled share-based

payment transactions that include a performance condition, share-based payments in which the manner of settlement is

contingent on future events, share-based payments settled net of tax withholdings and modification of share-based payment

transactions from cash-settled to equity-settled). The amendments have no impact on consolidated financial statements.

Amendments to IFRS 4 Insurance ContractsIFRS 4 Insurance Contracts - Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (effective

for financial periods beginning on or after 1 January 2018): Applying IFRS 9 Financial Instruments with IFRS 4. The amendments

bring certainty to insurers on whether, and how, they should apply IFRS 9 before they apply the forthcoming insurance contracts

standard. The amendments have no impact on consolidated financial statements.

IFRIC 22: Foreign Currency Transactions and Advance ConsiderationIFRIC 22: Foreign Currency Transactions and Advance Consideration (effective for financial periods beginning on or after 1

January 2018). The interpretation considers how to determine the date of the transaction when applying the standard on foreign

currency transactions IAS 21. The guidance aims to reduce diversity in practice. The interpretation has no impact on consolidated

financial statements.

Internal transfer of service activitiesInternal transfer of service activitiesWärtsilä has decided to transfer certain service activities from Marine Solutions to Services as of 1 January 2018. The aim is to

strengthen the focus on the development of these activities. The comparison periods for 2017 have been restated, resulting in

EUR 177 million in net sales, EUR 190 million in order intake, and EUR 49 million in order book being transferred from Marine

Solutions to Services for the financial period 2017. This transfer has no impact on Group totals.

This interim report is unaudited.


Anchor

Condensed statement of income

RestatedRestated RestatedRestated

MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Net sales 1 0661 066 1 005 4 911

Other operating income 77 13 60

Expenses -960-960 -911 -4 312

Depreciation, amortisation and impairment -30-30 -33 -134

Share of result of associates and joint ventures 33 1 13

Operating resultOperating result 8585 76 538

Financial income and expenses -9-9 -5 -47

Profit before taxesProfit before taxes 7676 70 491

Income taxes -19-19 -16 -117

Profit for the reporting periodProfit for the reporting period 5757 54 375

Attributable to:

Equity holders of the parent company 5858 53 375

Non-controlling interests -1-1 1 -1

5757 54 375

Earnings per share attributable to equity holders of the parent company (basic anddiluted):

Earnings per share (EPS), basic and diluted, EUR 0.100.10 0.09 0.63

Earnings per share for comparison periods have been restated to reflect the increased number of shares.

Anchor

Statement of other comprehensive income


MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Profit for the reporting periodProfit for the reporting period 5757 54 375

Other comprehensive income, net of taxes:Other comprehensive income, net of taxes:

Items that will not be reclassified to the statement of incomeItems that will not be reclassified to the statement of income

Remeasurements of defined benefit liabilities 7

Total items that will not be reclassified to the statement of incomeTotal items that will not be reclassified to the statement of income 7


Items that may be reclassified subsequently to the statement of incomeItems that may be reclassified subsequently to the statement of income

Exchange rate differences on translating foreign operations

for equity holders of the parent company -4-4 1 -73

for non-controlling interests -1 -2

Associates and joint ventures, share of other comprehensive income -1-1 3 -1

Cash flow hedges 1515 9 37

Tax on items that may be reclassified to the statement of income -2-2 -2 -9

Total items that may be reclassified to the statement of incomeTotal items that may be reclassified to the statement of income 77 12 -48

Other comprehensive income for the reporting period, net of taxesOther comprehensive income for the reporting period, net of taxes 77 11 -41

Total comprehensive income for the reporting periodTotal comprehensive income for the reporting period 6464 66 334

Total comprehensive income attributable to:

Equity holders of the parent company 6565 65 337

Non-controlling interests -1-1 1 -3

6464 66 334

Anchor

Condensed statement of financial position


MEURMEUR 31.3.201831.3.2018 31.3.201731.3.2017 31.12.201731.12.2017

Non-current assetsNon-current assets

Intangible assets 1 5861 586 1 421 1 577

Property, plant and equipment 346346 393 349

Investments in associates and joint ventures 6868 76 83

Other investments 1313 14 13

Deferred tax assets 120120 147 131

Other receivables 109109 46 132

Total non-current assetsTotal non-current assets 2 2422 242 2 096 2 285

Current assetsCurrent assets

Inventories 1 1681 168 1 184 1 051

Other receivables 1 9411 941 1 723 1 933

Cash and cash equivalents 282282 403 379

Total current assetsTotal current assets 3 3913 391 3 310 3 363

Total assetsTotal assets 5 6325 632 5 406 5 648


EquityEquity

Share capital 336336 336 336

Other equity 1 8091 809 1 744 2 016

Total equity attributable to equity holders of the parent company 2 1452 145 2 080 2 352

Non-controlling interests 2222 34 24

Total equityTotal equity 2 1672 167 2 114 2 376

Non-current liabilitiesNon-current liabilities

Interest-bearing debt 623623 592 517

Deferred tax liabilities 104104 90 102

Other liabilities 270270 276 270

Total non-current liabilitiesTotal non-current liabilities 997997 958 889

Current liabilitiesCurrent liabilities

Interest-bearing debt 103103 78 102

Other liabilities 2 3652 365 2 256 2 281

Total current liabilitiesTotal current liabilities 2 4682 468 2 334 2 383

Total liabilitiesTotal liabilities 3 4653 465 3 292 3 272

Total equity and liabilitiesTotal equity and liabilities 5 6325 632 5 406 5 648

Anchor

Condensed statement of cash flows

MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Cash flow from operating activities:Cash flow from operating activities:

Profit for the reporting period 5757 54 375

Adjustments for:

Depreciation, amortisation and impairment 3030 33 134

Financial income and expenses 99 5 47

Gains and losses on sale of intangible assets and property, plant and equipmentand other changes -3 -17

Share of result of associates and joint ventures -3-3 -1 -13

Income taxes 1919 16 117

Cash flow before changes in working capitalCash flow before changes in working capital 112112 104 643

Changes in working capital -108-108 -91 -87

Cash flow from operating activities before financial items and taxesCash flow from operating activities before financial items and taxes 44 13 555

Financial items and paid taxes -46-46 -12 -126

Cash flow from operating activitiesCash flow from operating activities -42-42 2 430

Cash flow from investing activities:Cash flow from investing activities:

Investments in shares and acquisitions -20-20 -1 -191

Net investments in property, plant and equipment and intangible assets -17-17 -4 -47


Proceeds from sale of shares in associated companies and other investments 2

Cash flow from other investing activities 1

Cash flow from investing activitiesCash flow from investing activities -37-37 -5 -235

Cash flow from financing activities:Cash flow from financing activities:

Proceeds from non-current debt 125125 90 90

Repayments and other changes in non-current debt -15-15 -45 -101

Changes in current loans and other changes -2-2 1 -2

Dividends paid -126-126 -114 -264

Cash flow from financing activitiesCash flow from financing activities -17-17 -67 -278

Change in cash and cash equivalents, increase (+)/decrease (-)Change in cash and cash equivalents, increase (+)/decrease (-) -96-96 -70 -83

Cash and cash equivalents at the beginning of the reporting period 379379 472 472

Exchange rate changes -3-3 1 -10

Cash and cash equivalents at the end of the reporting period 282282 403 379

Anchor

Consolidated statement of changes in equity

Total equity attributable to equity holders of the parent companyTotal equity attributable to equity holders of the parent company

Non-Non-controllingcontrolling

interestsinterestsTotalTotal

equityequity

MEURMEURShareShare

capitalcapitalShareShare

premiumpremium

Transla-Transla-tion dif-tion dif-ferenceference

FairFairvaluevalue

reservereserve

Remea-Remea-sure-sure-

ments ofments ofdefineddefinedbenefitbenefit

liabilitiesliabilitiesRetainedRetainedearningsearnings

Equity on 31 December 2016Equity on 31 December 2016 336336 6161 -57-57 -39-39 -45-45 2 0322 032 3434 2 3212 321

Restatement due to IFRS 9 -3-3 -3-3

Restatement due to IFRS 15 -13-13 -13-13

Equity on 1 January 2017Equity on 1 January 2017 336336 6161 -57-57 -39-39 -45-45 2 0162 016 3434 2 3052 305

Restated total comprehensive income for the financialperiod -74-74 2828 77 376376 -3-3 333333

Dividends paid -256-256 -6-6 -263-263

Equity on 1 January 2018Equity on 1 January 2018 336336 6161 -132-132 -10-10 -38-38 2 1352 135 2424 2 3762 376

Total comprehensive income for the reporting period -5-5 1212 5858 -1-1 6464

Dividends paid -272-272 -273-273

Equity on 31 March 2018Equity on 31 March 2018 336336 6161 -136-136 22 -39-39 1 9211 921 2222 2 1672 167


Total equity attributable to equity holders of the parent companyTotal equity attributable to equity holders of the parent company

Non-Non-controllingcontrolling

interestsinterestsTotalTotal

equityequity

MEURMEURShareShare

capitalcapitalShareShare

premiumpremium

Transla-Transla-tion dif-tion dif-ferenceference

FairFairvaluevalue

reservereserve

Remea-Remea-sure-sure-

ments ofments ofdefineddefinedbenefitbenefit

liabilitiesliabilitiesRetainedRetainedearningsearnings

Equity on 31 December 2016Equity on 31 December 2016 336 61 -57 -39 -45 2 032 34 2 321

Restatement due to IFRS 9 -3 -3

Restatement due to IFRS 15 -13 -13

Equity on 1 January 2017Equity on 1 January 2017 336 61 -57 -39 -45 2 016 34 2 305

Restated total comprehensive income for thereporting period 5 8 53 1 66

Dividends paid -256 -257

Equity on 31 March 2017Equity on 31 March 2017 336 61 -52 -31 -45 1 812 34 2 114

Anchor

Acquisitions

Trident Group and LOCK-N-STITCH Inc.Trident Group and LOCK-N-STITCH Inc.

In February, Wärtsilä acquired 100% of Trident B.V. and LOCK-N-STITCH Inc.

Trident B.V. is a Netherland based company specialised in underwater ship maintenance, inspection, and repair services. With this acquisition,Wärtsilä builds in-house competence, captures the full potential of services’ product synergies, and strengthens its position in the market.

LOCK-N-STITCH Inc. is an American engineering company serving customers within the marine and energy sectors as well as other industries. Itspecialises in cast iron repairs. The acquisition strengthens Wärtsilä’s service portfolio for customers operating multiple brands.

The following tables summarise the preliminary amounts for the consideration paid, the cash flow from the acquisitions and the amounts of theassets acquired and liabilities assumed recognised at the acquisition dates.

Preliminary considerationPreliminary consideration MEURMEUR

Consideration transferred 2525

Total consideration transferredTotal consideration transferred 2525

Preliminary cash flow from the acquisitionsPreliminary cash flow from the acquisitions MEURMEUR

Consideration paid in cash 2020

Contingent consideration 44

Cash and cash equivalents of the acquired companies -1-1

Total cash flow from the acquisitionsTotal cash flow from the acquisitions 2424


Provisional values of the assets and liabilities arising from the acquisitionProvisional values of the assets and liabilities arising from the acquisition MEURMEUR

Intangible assets 1111

Property, plant and equipment 22

Inventories 11

Trade and other receivables 55

Cash and cash equivalents 11

Total assetsTotal assets 1919

Trade payables and other liabilities 33

Deferred tax liabilities 22

Total liabilitiesTotal liabilities 66

Total net assetsTotal net assets 1414

Preliminary goodwillPreliminary goodwill 1111

The preliminary fair values of acquired identifiable intangible assets at the dates of acquisitions (including technology, customer relations, and trademarks) amounted to EUR 11 million. The fair value of current trade receivables and other receivables is approximately EUR 5 million. The fair valueof trade receivables does not include any significant risk.

The preliminary goodwill of EUR 11 million reflects the value of know-how and expertise in advanced underwater services.

During 2018, the acquisition-related costs the Group incurred related to external legal fees and due diligence costs were insignificant. The costshave been included in the other operating expenses in the condensed statement of income.

Pro formaPro forma

If the acquisitions had occurred on 1 January 2018, management estimates that consolidated net sales would have been EUR 1,067 million. Theimpact in the consolidated operating result would not have been significant. In determining these amounts, management has assumed that the fairvalue adjustments, which arose on the dates of acquisitions would have been the same if the acquisitions had occurred on 1 January 2018.

Anchor

Net sales by geographical areas


MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Europe 340340 320 1 526

Asia 366366 366 1 933

The Americas 246246 253 1 132

Other 114114 67 321

TotalTotal 1 0661 066 1 005 4 911

Anchor


Disaggregation of revenue

Revenue from the contracts with customers is derived over time and at a point in time in the following revenue types.

Net sales by revenue typeNet sales by revenue type

MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Products 261261 289 1 149

Goods and services 111111 117 567

Projects 569569 516 2 785

Long-term agreements 125125 84 410

TotalTotal 1 0661 066 1 005 4 911

Timing of satisfying performance obligationsTiming of satisfying performance obligations

MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

At a point in time 771771 688 3 522

Over time 295295 317 1 389

TotalTotal 1 0661 066 1 005 4 911

Product sales consist of sales of spare parts and standard equipment for which the revenue is recognised at a point in time when the control of theproducts has transferred to customer, in general at the delivery of the goods.

Goods and services -type of revenue involves short-term field service jobs, which includes the delivery of a combination of service and equipment.The revenue is recognised at a point in time when service is rendered.

Projects contain short-term and long-term projects. Depending on the contract terms and the duration of the project, the revenue is recognised ata point in time or over time. Revenue related to long-term projects, such as construction contracts, integrated solutions projects, ship design, andenergy solutions contracts, is recognised over time. Revenue for tailor-made equipment delivery projects is recognised at a point in time.

Long-term agreements contain long-term operating and maintenance agreements for which the revenue is recognised over time.

Anchor

Measures of profit and items affecting comparability


MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Comparable adjusted EBITAComparable adjusted EBITA 9898 90 612

Purchase price allocation amortisation -10-10 -9 -36


Comparable operating resultComparable operating result 8888 82 576

Items affecting comparability:Items affecting comparability:

Social plan costs -2-2 -1 -10

Impairment and write-downs -2 -18

Transfer costs -3

Other restructuring costs -3 -7

Items affecting comparability, totalItems affecting comparability, total -3-3 -6 -37

Operating resultOperating result 8585 76 538

Anchor

Intangible assets and property, plant & equipment

MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Intangible assetsIntangible assets

Carrying amount on 1 January 1 5771 577 1 434 1 434

Changes in exchange rates -4-4 -1 -39

Acquisitions 2222 1 217

Additions 77 2 25

Amortisation and impairment -16-16 -15 -60

Carrying amount at the end of the reporting periodCarrying amount at the end of the reporting period 1 5861 586 1 421 1 577

Property, plant and equipmentProperty, plant and equipment

Carrying amount on 1 January 349349 405 405

Changes in exchange rates -1-1 -12

Acquisitions 22

Additions 1010 6 39

Depreciation and impairment -14-14 -18 -75

Disposals and reclassifications -10

Carrying amount at the end of the reporting periodCarrying amount at the end of the reporting period 346346 393 349

Anchor

Gross capital expenditure

MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Investments in securities and acquisitions 2020 1 191

Intangible assets and property, plant and equipment 1717 8 64

TotalTotal 3737 9 255


Anchor

Net interest-bearing debt

MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Non-current liabilities 623623 592 517

Current liabilities 103103 78 102

Loan receivables -6-6 -7 -5

Cash and cash equivalents -282-282 -403 -379


Anchor

Financial ratios


1–3/20181–3/2018 1–3/20171–3/2017 20172017

Earnings per share (EPS), basic and diluted, EUR 0.100.10 0.09 0.63

Equity per share, EUR 3.623.62 3.52 3.97

Solvency ratio, % 42.942.9 43.6 46.3

Gearing 0.210.21 0.13 0.10

Return on investment (ROI), % 19.719.7 16.8 18.5

Return on equity (ROE), % 17.617.6 16.9 16.0

Earnings per share and equity per share for comparison periods have been restated to reflect the increased number of shares.

Anchor

Personnel

1–3/20181–3/2018 1–3/20171–3/2017 20172017

On average 18 12518 125 17 802 17 866

At the end of the reporting period 18 18218 182 17 832 18 065


Anchor

Contingent liabilities

MEURMEUR 1–3/20181–3/2018 1–3/20171–3/2017 20172017

Mortgages 1010 10 10

Chattel mortgages and other pledges and securities 1818 25 19


Guarantees and contingent liabilities

on behalf of Group companies 750750 975 737

Nominal amount of rents according to leasing contracts

payable within one year 3333 31 35

payable between one and five years 9292 80 101

payable later 6363 26 48

TotalTotal 938938 1 112 922

Anchor

Nominal values of derivative instruments

MEURMEUR Total amountTotal amount of which closedof which closed

Interest rate swaps 285285

Cross currency swaps 7676

Foreign exchange forward contracts 2 4302 430 1 0141 014

TotalTotal 2 7922 792 1 0141 014

In addition, the Group had copper futures and swaps amounting to 213 tons.

Anchor

Fair values

Fair value measurements at the end of the reporting period:Fair value measurements at the end of the reporting period:

MEURMEUR

Carrying amountsCarrying amountsof the statementof the statement

of financialof financialposition itemsposition items

FairFairvaluevalue

Financial assetsFinancial assets

Other investments (level 3) 1313 1313

Interest-bearing investments, non-current (level 2) 66 66

Other receivables, non-current (level 2) 33 33


Derivatives (level 2) 4040 4040

Financial liabilitiesFinancial liabilities

Interest-bearing debt, non-current (level 2) 623623 630630

Derivatives (level 2) 2828 2828

Anchor

Events after the balance sheet date

On 19 March 2018, Wärtsilä signed an agreement to acquire Transas, a global company headquartered in the U.K. Transas is a global marketleader in marine navigation solutions that include complete bridge systems, digital products and electronic charts. The company is also a leader inprofessional training and simulation services, ship traffic control, as well as monitoring, and support.

Transas’ current annual net sales are in the region of EUR 140 million. The company has 22 regional offices worldwide and a distribution networkthat spans 120 countries. It has a workforce of approximately 1,000 employees who will be integrated within Wärtsilä’s market area MarineSolutions.

This acquisition takes Wärtsilä a significant step closer to achieving its mission of enabling sustainable societies with smart technologies. It will alsospeed delivery on the company’s promise to disrupt the industry by establishing an ecosystem that is digitally connected across the entire supplychain, through applications that are secure, smart and cloud-based.

The transaction is valued at EUR 210 million (enterprise value) and is expected to be closed during the second quarter of 2018.

Anchor

Quarterly figures

RestatedRestated RestatedRestated RestatedRestated RestatedRestated

MEURMEUR1–3/1–3/

2018201810–12/10–12/

201720177–9/7–9/

201720174–6/4–6/

201720171–3/1–3/

2017201710–12/10–12/

201620167–9/7–9/

201620164–6/4–6/

201620161–3/1–3/

20162016

Order intakeOrder intake

Services 737737 696 598 641 735 565 522 527 580

Energy Solutions 414414 501 418 361 405 501 330 304 312

Marine Solutions 357357 316 339 361 273 258 287 362 379

TotalTotal 1 5071 507 1 514 1 354 1 363 1 413 1 324 1 139 1 194 1 271

Order book at the end of the reporting periodOrder book at the end of the reporting period

Services 1 4011 401 1 220 1 249 1 239 1 234 999 1 031 1 048 1 017

Energy Solutions 2 0122 012 1 871 1 839 1 764 1 847 1 680 1 676 1 547 1 491

Marine Solutions 2 0772 077 2 009 2 018 2 087 2 033 2 017 2 317 2 488 2 595

TotalTotal 5 4905 490 5 100 5 107 5 089 5 114 4 696 5 024 5 083 5 103


Net salesNet sales

Services 535535 710 569 594 534 636 512 542 500

Energy Solutions 267267 425 324 412 239 414 177 220 132

Marine Solutions 264264 305 282 284 233 509 390 433 335

TotalTotal 1 0661 066 1 441 1 175 1 290 1 005 1 559 1 079 1 196 967

Share of result of associates and joint ventures 33 6 3 3 1 5 2 4 3

Comparable adjusted EBITA 9898 250 141 130 90 262 132 131 93

as a percentage of net sales 9.29.2 17.4 12.0 10.1 9.0 16.8 12.3 10.9 9.6

Depreciation, amortisation and impairment -30-30 -42 -30 -30 -33 -34 -31 -42 -31

Purchase price allocation amortisation -10-10 -10 -9 -9 -9 -9 -9 -9 -9

Comparable operating result 8888 241 131 122 82 253 123 122 84


Items affecting comparability, total -3-3 -19 -4 -8 -6 -22 -2 -26 -1

Operating result 8585 222 127 114 76 231 122 96 83


Financial income and expenses -9-9 -10 -17 -14 -5 -5 -7 -38 -3

Profit before taxes 7676 211 110 99 70 226 115 58 80

Income taxes -19-19 -47 -28 -26 -16 -55 -31 -17 -20

Profit for the reporting period 5757 165 82 73 54 172 84 41 60

Earnings per share (EPS), basic and diluted, EUR 0.100.10 0.28 0.14 0.12 0.09 0.29 0.14 0.06 0.10

Gross capital expenditure 3737 79 156 11 9 20 55 60 11

Investments in securities and acquisitions 2020 45 145 1 42 49

Cash flow from operating activities -42-42 276 150 2 2 235 189 202 -13

Working capital (WCAP) at the end of the reportingperiod 726726 563 632 658 561 490 540 602 709

Personnel at the end of the reporting periodPersonnel at the end of the reporting period

Services 11 32811 328 11 234 11 135 11 059 11 067 10 567 10 648 10 575 10 331

Energy Solutions 1 0841 084 1 038 1 017 928 913 903 920 945 958

Marine Solutions 5 1975 197 5 235 5 167 5 257 5 317 6 074 6 305 6 443 6 681

Other 573573 559 540 539 533 467 464 465 457

TotalTotal 18 18218 182 18 065 17 859 17 783 17 832 18 011 18 337 18 428 18 427

Earnings per share for comparison periods have been restated to reflect the increased number of shares.

Comparison periods for 2017 have been restated due to the internal transfer of service activities.


Anchor

Calculation of financial ratios

Earnings per share (EPS), basic and dilutedEarnings per share (EPS), basic and diluted

Profit for the reporting period attributable to equity holders of the parent company

Adjusted number of shares over the reporting period

Equity per shareEquity per share

Equity attributable to equity holders of the parent company

Adjusted number of shares at the end of the reporting period

Solvency ratioSolvency ratio

Equity

Total equity and liabilities – advances receivedx 100

GearingGearing

Interest-bearing liabilities – cash and cash equivalents

Equity

Return on investment (ROI)Return on investment (ROI)

Profit before taxes + interest and other financial expenses

Total equity and liabilities – non-interest-bearing liabilities – provisions, average over the reporting periodx 100

Return on equity (ROE)Return on equity (ROE)

Profit for the reporting period

Equity, average over the reporting periodx 100

Working capital (WCAP)Working capital (WCAP)

(Inventories + trade receivables + income tax receivables + other non-interest-bearing receivables)– (trade payables + advances received + pension obligations + provisions + income tax liabilities + other non-interest-bearingliabilities – dividend payable)

Comparable adjusted EBITAComparable adjusted EBITA

Operating result – items affecting comparability – purchase price allocation amortisation

Comparable operating resultComparable operating result

Operating result – items affecting comparability

Items affecting comparabilityItems affecting comparability

Items affecting comparability are related to restructuring measures and one-time charges for events or activities, which are not part ofthe normal business operations

Anchor23 April 2018

Wärtsilä Corporation

Board of Directors


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